Everything You Need to Know About the MGT Act Implementation

Agencies looking to fund projects through the Technology Modernization Fund now have a clearer path to do so. Last week, the Office of Management and Budget sent out memo M-18-12, which set into motion the Modernizing Government Technology Act that President Trump signed into law in December 2017.

The OMB memo outlines the initial process for submitting project proposals to the Board, which will use financial, technical and operational criteria to approve projects for funding. Approved projects will receive funds in increments, and that funding will be tied to specific project milestones and objectives that are regularly monitored by the Board for success.

“Successful projects will demonstrate a strong execution strategy, technical approach, and have a strong team with a demonstrated history of successful modernization efforts,” the memo explains. Here’s a quick look at the criteria the Board will use to select projects:

1. Impact on Agency Mission

The successful execution of the project must have a demonstrable and visible impact on the public, and it must address an urgent problem, like cybersecurity, financial or operational issues.

2. Feasibility

The project must have strong executive visibility and support, and it must identify key milestones for success.

3. Opportunity Enablement

The project must show detailed information on how the agency will reduce costs or dramatically improve service quality through modernization.

4. Common Solutions

The project must ensure that security is woven into the progress from the outset, and that it complements service delivery and mission objectives. Agencies are also encouraged to consider the adoption of commercial technology solutions in their proposals and provide a strong technical approach and acquisition strategy to implement those solutions

Further guidance explains that agency proposals to the $500 million fund (the MGT Act authorizes this amount, but appropriations are pending) should result in reimbursements no more than 12 months after the date of a transfer, or six months after completion of the project, and that they should not be disproportionately back-loaded. If an agency fails to reimburse the central fund and is unable to resolve the issue with GSA, the OMB chief will serve as a mediator. Those agencies looking to establish their own capital funds for IT modernization are required to notify OMB by March 27.

The OMB memo is also significant because it outlines how agencies can begin to set up their own IT Working Capital Funds. They can now begin submitting initial proposals, the report states.

“If an agency establishes an IT WCF under the MGT Act, OMB will oversee the fund and the IT investments it supports consistent with OMB’s management and budget development role,” according to the memo. “In the fiscal quarter after an agency establishes an IT WCF, and every quarter thereafter, the agency will report to OMB on all IT investments funded out of the IT WCF.”

Especially for large- and mid-sized agencies, the MGT Act looks promising. For other smaller and component agencies, such as the Corporation for National and Community Service and Immigration and Customs Enforcement, the MGT Act and modernization fund won’t be applicable.